Tag Archives: Interest-only Housing Loans

New home sales in Singapore have shot through the roof recently. Resale prices of many popular projects have also risen from the lows early this year.

MEASURES TO ENSURE A STABLE AND SUSTAINABLE PROPERTY MARKET

THE Government has introduced new measures to prevent the fast-rising private property market from overheating.

It is removing the interest absorption scheme, which allows buyers to defer the bulk of their purchase price until the property is ready for occupation, with immediate effect. Only those uncompleted private projects where the units have already been offered for sale under this scheme can continue to do so.

It is also taking away the interest-only housing loans. These two schemes are forms of housing loans that entirely eliminate or substantially lower regular instalment payments for property purchasers in the first few years before the properties are completed.

They could thus encourage property speculation in a buoyant market where prices are rising rapidly, said the Government in a joint release on Monday.

The removal of both schemes comes into immediate effect. Continue reading →

Singapore’s Minister for National Development Mah Bow Tan has just announced measures for a ‘stable and sustainable property market’.

Among other things, his Ministry will resume selling land under the confirmed list in the first half of next year. Such land sales were suspended in October last year in the aftermath of the global financial crash. The Government will also include sites for executive condos, a hybrid between public and private housing, in the confirmed list to offer more housing choices.

Secondly, the Government is banning interest absorption scheme (IAS) and interest-only housing loans (IOL) with immediate effect, i.e. Sept 14, 2009. This measure will apply to all private residential projects. The only exception will be uncompleted private residential projects where units had already been offered for sale under IAS before Sept 14.

Interest-only housing loans will be disallowed with immediate effect. ‘These schemes could encourage property speculation in a buoyant market where prices are rising rapidly, as they are forms of housing loans that entirely eliminate or substantially lower regular instalment payments for property purchasers in the first few years before the properties are completed,’ a statement by the government said. Continue reading →